Abstract

This study aims to analyze the influence of audit firm size and industry
specialization auditor on audit quality by the level of litigation risk as a
moderating variable on the manufacturing companies listed on the Indonesia
Stock Exchange in 2008 until 2010. Audit firm size and audit firm industry
specialization auditor as the independent variables and the quality audit that
proxied by discretionary accrual as the dependent variable.
Data from this study were obtained from financial statements of
manufacturing firms drawn from the Indonesia Stock Exchange and Indonesian
Capital Market Directory. The population of this study are manufacturing
companies listed on the Indonesia Stock Exchange during the years 2008-2010
amounting to 450 companies. Determination of the sample using purposive
sampling method. Type of data are secondary data in the form of financial
statement as the media manufacturing companies. Data analysis tool is analysis
of Covariances with the computer program SPSS version 19.
The results of this study indicate that audit firm size that proxied by BIG
4 auditor, are moderated by the level of litigation risk provide higher audit quality
than non BIG 4 auditors while audit firm industry specialization are not
moderated by the level of litigation risk. Audit firm industry specialization do not
necessarily provide higher audit quality than audit firm non industry
specialization.